Why the political war dance against pension reform?

Published 6:57 am Tuesday, August 7, 2018


Guest columnist

The animosity shown by certain groups within the public-education sector toward Gov. Bevin and the legislature’s Republicans regarding their efforts at reforming the commonwealth’s ailing public pension systems should have reasonable Kentuckians of all political persuasions scratching their heads.

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Along with passing a budget this year which fully funds the commonwealth’s retirement systems for the first time in history, the legislature passed and Bevin signed pension-reform legislation which changes little for current teachers yet ensures a generous, secure retirement plan for new educators.

Still, angry teachers misled by superintendents, union bosses and partisan-minded politicians shut down schools in order to protest against Bevin and the GOP at the Capitol, where gubernatorial candidate and Attorney General Andy Beshear promised he would litigate to stop the pension-reform bill from being implemented.

Reasonable Kentuckians who know the pension liability is the most serious threat to the commonwealth’s economic security and future want to know: where were the protests over former Democratic Gov. Steve Beshear’s decision to fiddle while the commonwealth’s pension liabilities grew by $1 billion during his eight-year tenure?

They also wonder why it is that when Bevin comes along and includes in his budget proposal to the General Assembly a whopping $3.3 billion for Kentucky’s retirement systems — 15 percent of the current two-year General Fund budget, which the Republican-led legislature winds up passing — these teachers want to throw him and his party out of office.

Have they forgotten about the constant uncertainty and volatility experienced by the pension systems during former Gov.  Beshear’s administration, which not only presided over that huge increase in liabilities but provided less than 40 percent of the funding actuaries said is needed to fully support the plans?

Rather than continuing with these emotional outbursts against the current administration that contain little substance, perhaps the protesters should be demanding answers about why it is that Bevin and the Republicans found ways to stabilize the pension system while Beshear and his party failed to do the same.

The truth is had the former governor, the attorney general’s father, acted more responsibly regarding the pension problem, the systems’ liability would be lower today and the commonwealth’s retirement plans on more solid ground.

For the protesters and their union chiefs, this seems much more about partisan politics than trying to solve the biggest financial problem facing Kentucky.

After all, there was no attorney general promising a lawsuit or teachers threatening sick-outs from schools in November 1999 when then-Democratic Gov. Paul Patton bemoaned the fact that the retirement systems faced future danger because increases in benefits weren’t properly funded, even as union bosses and their public-worker constituents sought more benefit enhancements.

“If we continue to piecemeal these kinds of changes in benefits that impact the financial condition of these funds without looking seriously at what the long-term impacts are of those changes, we could really be impacting the long-term financial health of the system,” Crit Luallen, Patton’s cabinet secretary, said at the time, as reported by the Lexington Herald-Leader on November 29, 1999.

These concerns were expressed on the heels of benefit enhancements granted in 1998 without a single dollar of the funding needed to support them, which began the Kentucky Employees Retirement System’s funding-level decline, from nearly 122 percent when the Herald-Leader’s report was published to less than 14 percent funded today.

Reasonable retirees and current teachers who just want to make sure they have a secure retirement waiting for them should question why their union geniuses, superintendents and progressive politicians offered nothing but crickets while Democratic leaders fiddled and complained, yet are presenting a full-fledged political war dance against Republican leaders who fully fund current systems and offer reasonable plans for the future. 

Jim Waters is president and CEO of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. He can be reached at jwaters@freedomkentucky.com and @bipps on Twitter.